Dec 2017
20
Employer NICs to be paid on Termination Payments from 6th April 2019
In the Spring Budget 2017, it was announced by the Chancellor of the Exchequer, Philip Hammond, that termination payments over £30,000 which are currently subject to income tax, would be subject to Employer National Insurance Contributions from April 2018. The government, however, has announced on 2nd November that the introduction of the National Insurance Contributions bill has been delayed.
From 6th April 2019 rather than 6th April 2018 Class 1A employer National Insurance contributions will be payable on termination payments over £30,000.
At the moment, generally the first £30,000 of a termination payment is free of tax and no National Insurance contributions will be due on any part of the payment to the extent that it would have qualified for tax exemption. In the Finance Bill 2017, the tax treatment of termination payments will be clarified and this will include all contractual and non-contractual payments in lieu of notice taxable as earnings and requiring employers to tax the equivalent of an employee’s basic pay if notice is not worked. The changes, including to Foreign Service Relief, will take effect from 6 April 2018.
For further information select here.
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Dec 2017
18
Minimum Wage Increase on 1st April 2018
The Low Pay Commission’s Autumn 2017 report has been published and on the 1st April 2018, the minimum wage will increase again.
The National Minimum Wage (NMW) is the minimum pay per hour most employees are entitled to by law. An employee's age and if they are an apprentice will determine the rate they will receive.
Dec 2017
6
Autumn Budget 2017 - Employer Focus
The main points to be noted by employers from Autumn Budget 2017, as announced by Chancellor of the Exchequer, Philip Hammond are:
- The personal tax allowance will increase by £350 from £11,500 to £11,850 from 6th April 2018. This is in line with the government's goal to have the personal tax allowance at £12,500 by 2020.
- The higher rate tax threshold will increase to £46,350 from £45,000.
- As previously announced, there has been a delay by one year on the series of changes for NICs to be implemented. These changes will now take effect from April 2019. They include the reforms to the NIC treatment of termination payments, abolition of Class 2 NICs and changes to NICs treatment of sporting testimonials.
- The planned increase in Class 4 NICs from 9% to 10% in April 2018 and to 11% in April 2019 by the government will no longer be happening.
- There is an increase in the Company Car Tax (CCT) diesel supplement to 4% from 3%. The supplement will apply to diesel cars registered on or after 1st January 1998 that are not certified to the Real Driving Emissions 2 standard. It will not apply to diesel hybrids or other vehicles except cars.
- From 6th April 2018 there will be no Benefit in Kind charge on electricity that employers provide to charge employees’ electric vehicles.
- The Government has announced its intention to consult on the extension to the private sector of the IR35 reforms, introduced in the public sector earlier this year.
- There is an increase of the lifetime allowance for pension savings, rising to £1,030,000 for 2018-19.
- The National Minimum Wage details for 1st April 2018 were published.
- HMRC's compliance team are monitoring employers that are claiming the Employment Allowance, as it has been reported that some employers are using avoidance schemes to avoid paying National Insurance amounts due.
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Dec 2017
5
Customer Update - December 2017
5 simple scenarios to stop pension scams
A pension scam – when someone tries to con you out of your pension money – will often start by someone contacting you unexpectedly with one of many pension scenarios. If you find yourself in one of these scenarios make sure to act fast to prevent becoming a victim of a pension scam.
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The ‘duties start date’ is the date that an employee first begins to work for a company. For those recruiting after October 1st 2017, it is important to be aware that as soon as their new hire begins working for them, their automatic enrolment duties will also begin straight away.
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